ASHEVILLE, MAGGIE VALLEY AND WAYNESVILLE NC REAL ESTATE IS SHIFTING AGAIN AS FED RAISES INTEREST RATES.
After many years of low interest rates, the Federal Reserve has raised the rates from 2.25 percent to 2.5 percent. With only eight increases in the last 10 years, and three in 2018.
The Fed doesn’t set mortgage rates, the federal fund rates they institute impact short term and variable interest rates. When the Fed rate increases, the cost of lending between banks and lenders does as well. These financial institutions may choose to pass the incurred costs to consumers in the form of higher rates on mortgages.
Even with the Fed increases Mortgage rates have declined slightly, which opens up the possibility for better home sales if the latest trend continues into the new year, mortgage rates are still well above last year’s rate and are already having a noticeable effect on demand.”
Maggie Valley and Waynesville Home Buyers are pushing back on home prices. First time buyers are now dealing with further reduced budgets because of the higher interest rates, and most sellers are now in a situation where they will have to take on a mortgage with a notably higher interest rate than the one on their current mortgage. The relative difference in rates is likely to impact the decisions of people who currently hold mortgages at arguably the lowest rates we have ever had.”
Sellers Taking Advantage of the Present
Personally, I would be encouraging anyone who’s thinking about selling in the next three to five years to sell now. As the balance over this time will favor the Home Buyers.
Western North Carolina Language of Financing
Some of the Builders in Asheville, Waynesville and Maggie Valley NC are seeing specific promotions tied to the builder’s preferred lender that allow for customers to buy their interest rates down either for the life of the loan, like a 30-year fixed, or for shorter terms, such as a 7/1 ARM.
We most likely will see instead of slashing prices, Maggie Valley and Waynesville NC home builder will find the solution will be to offer an attractive financial incentive to New Construction Home Buyers and to get them into an interest rate that allows them to purchase the home at a monthly payment that they can qualify for and sustain long term. That’s why it is incumbent for the on-site salesperson and for brokers that practice traditional residential resale to be well-versed in the language of financing and economics.
In the Asheville, Maggie Valley and Waynesville NC market, we must couple the art of selling with conversations about financing. To that end, we’re actively training to make sure our salespeople are beyond competent in discussing financing and financial incentives with their customers. This is as important as knowing comps, home features, schools, and commute times.”
Re-Review Mortgage Options
As the rate increase moves into more headlines, clients will be looking to their agents for counsel and the best mortgage recommendations.
I believe it is up to Professional Real Estate Agents, review mortgage options and stay current in their area to ensure their clients are getting the best deal possible. There are several things to keep in mind before bringing a mortgage company in front of your clients.”
This is just the beginning of another shift in real estate and it is important your real estate agent stays on top of lending costs and inventory of homes that will not only fit your needs but you pocket book as well.